Mesaba prepares to cut union wages, benefits Thursday

In the airline industry contract talks are often long and bitter, especially when an airline flirts with with or lands in bankruptcy.

At Mesaba, unions have insisted the bankrupt airline is asking for more than it needs to post a fair profit and compete for flying contracts with Northwest and other big airlines.

“If they don't reach a deal, [Mesaba] can just impose terms and the pilots, flight attendants and everybody else are barred from striking.”

University of Minnesota professor John Budd

Last week federal bankruptcy judge Gregory Kishel gave Mesaba authority to reject union contracts. As of 12:01 a.m. Thursday, the company can unilaterally impose wage and benefit cuts on the unions.

Late Monday night, Kishel issued a key ruling that strengthened the airline's hand at the bargaining table. Kishel blocked the unions from striking if the airline rejects their contracts.

Late Tuesday afternoon, Mesaba's unions filed an appeal of both rulings. Tom Wychor, chairman of the Air Line Pilots Association at Mesaba Airlines, criticized the decisions.

"The judge's ruling is totally outrageous, stripping workers of their basic rights as laborers to defend themselves," said Wychor. "Minnesotans have died for these rights. To strip them from workers and say you are going to lose your contract and be told what rates of pay you will work under is unacceptable."

Mesaba contends it needs to cut annual labor costs by 17.5 percent if it's to be a viable business. The airline says it must lower its costs to compete for flying contracts with Northwest Airlines and other major carriers.

Mesaba says the airline will keep trying to bargain new contracts even if it tosses out the current agreements. Meanwhile, spokeswoman Elizabeth Costello says passengers don't need to worry about a shutdown of the airline.

"We plan to continue negotiating in order to find a solution that ensures the company is positioned to emerge successfully from bankruptcy and that works for employees," said Costello. "However, now passengers, our customers can continue their travel plans with assurance and knowing we will get them where they are going reliably."

But the chances of Mesaba and its unions reaching deals may be more remote now.
University of Minnesota professor John Budd doubts the unions and airline will reach an agreement since Mesaba doesn't have to worry about a strike.

"The latest ruling by judge Kishel really removes the risk for the airline," said Budd. "Before Mesaba had an incentive to negotiate because there'd be the risk of a strike if they didn't reach a deal. Now, they know that if they don't reach a deal, they can just impose terms and the pilots, flight attendants and everybody else are barred from striking."

Tom Wychor of the pilots union says the greatest sticking point in contract talks has to do with rewarding employees when the airline is firmly back in the black.

"The biggest gulf that we are apart on has to do with what happens when the fortunes change," said Wychor. "If we were to receive an allocation of jets from Northwest or another carrier, and the company again shows profitability, we want the return on our investment. We want to share in those profits."

Pilots now make about $21,000 to $90,000 a year, depending on seniority and the plane flown. Their union says Mesaba is looking to cut wage rates by six percent.